Walgreens CEO Rosalind Brewer called the company’s second quarter “transformational” because of the continued growth of VillageMD and its $8.9 billion acquisition of provider group Summit Health.
In a March 28 earnings call, Ms. Brewer said when VillageMD, which Walgreens has a majority ownership stake in, bought Summit Health in January it created “one of the largest integrated provider platforms in the U.S.,” according to a transcript published by financial news site Seeking Alpha. She said Walgreens put $3.5 billion toward the deal.
Despite lower profits overall in the quarter, driven by reduced COVID-19 vaccinations, Walgreens’ healthcare business grew significantly. That business had more than $1.6 billion in sales in the second quarter, compared to $527 million in the same quarter a year earlier, due in large part to more than $1.1 billion in sales from VillageMD.
With the purchase of Summit Health and its partner company, CityMD, VillageMD finished the quarter with 729 clinics, compared to 270 at the end of last year, according to the call. More than 200 of them are co-located in Walgreens, leading to an additional 40 prescriptions per day being filled at those stores. VillageMD cares for 806,000 value-based care patients, including 177,000 who are on Medicare.
